Vioxx judge steps in to split $350 ml plaintiffs lawyer pie

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It was easier for the plaintiffs lawyers who represented victims of Merck’s Vioxx painkiller to finalize a $4.85 billion settlement with Merck than to reach a fee-sharing agreement with one another.

On Wednesday, the New Orleans federal court judge who presided over the Vioxx multidistrict litigation issued a 132-page final order distributing $350 million in so-called “common benefit attorneys fees” to the lawyers whose work in the MDL contributed to the 2007 global settlement with Merck. In case you weren’t keeping track, total plaintiffs lawyers’ fees in the Vioxx litigation were capped at $1.55 billion, of which more than $1 billion has already been paid out; the $350 million in common benefit fees, which comes out of that $1.55 billion, represents money that all of the lawyers who collected Vioxx contingency fees owe to the small group of plaintiffs lawyers responsible for bringing Merck to the table and negotiating a deal with the drug maker.

Judge Eldon Fallon is the most patient of jurists, but even he was disheartened by the ugliness of the fight over the $350 in common benefit fees — skirmishing that involved a special court-appointed committee of plaintiffs lawyers, a special discovery master, two rounds of objections from lawyers who claimed the committee had a conflict of interest, and a week-long hearing in which committee members and objectors had the chance to cross-examine one another. After a 10-page description of the bitter process, Fallon wrote, “Counsel for individual [Vioxx] claimants have already received over one billion dollars pursuant to contingent fee agreements. Many, if not all, of the common benefit fee applicants are also primary counsel in at least some if not many cases and thus have already received substantial compensation pursuant to contingency fee agreements with their own clients,” the judge continued. “For this reason, it is disconcerting and disappointing to receive such vexatious, vitriolic, and acerbic briefs from some of the attorneys who seek common benefit fees.”

In the end, Judge Fallon noted, only four of the 18 firms that objected to the original allocation plan refused to go along with the final version. Two of those firms are the biggest losers in Fallon’s order. Escobedo, Tippit & Cardenas and The Snapka Law Firm were co-counsel in an early Vioxx trial in Texas state court, winning a $32 million verdict that was later reversed and is still on appeal. Although Escobeda Tippit’s case was not part of the MDL and the firm didn’t do any work in the MDL, Escobeda claimed its trial benefitted other Vioxx claimants. Along with Snapka, it asked for a total of $31.5 million. Judge Fallon awarded Escobeda $1.6 million and Snapka (which had a limited role in the MDL) $1.1 million for their case’s “salutary effect on the Vioxx litigation.” (I left messages with both firms but didn’t hear back.) Another objector, The Branch firm, asked for $3.9 million for its work on New Jersey state court Vioxx cases that allegedly helped drive the company to settlement talks. Judge Fallon awarded the firm $500,000. (Turner Branch didn’t return my call.)

The plaintiffs firms taking home the biggest share of the $350 million are Seeger Weiss and Beasley Allen, both of which were awarded $36.6 million by Judge Fallon. (The Beasley award was about $500,000 less than the plaintiffs lawyer special committee originally recommended; Seeger Weiss was awarded $4.3 million less than the committee originally proposed.) Herman, Herman, Katz & Cotlar, which led the allocation process and took much of the heat from objectors, was awarded $26 million, a $6.5 million haircut from the $32.5 million recommended by the plaintiffs lawyers’ committee. Judge Fallon awarded The Lanier Law Firm, which won a huge verdict in the first Vioxx case to go to trial and helped financed the MDL, the entire $27 million the committee recommended.

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Alison Frankel updates On the Case multiple times throughout the day on WestlawNext Practitioner Insights. A founding editor of the Litigation Daily, she has covered big-ticket litigation for more than 20 years. Frankel’s work has appeared in The New York Times, Newsday, The American Lawyer and several other national publications. She is also the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.